If the stock market were a boxing arena, Boston Acoustics (NASDAQ:BOSA), with its $62 million market cap, would likely find itself sparring as a featherweight. But as the saying goes, "It's not the size of the dog in the fight; it's the size of the fight in the dog." And as announced recently, the company scored some hits with a series of jabs in its third quarter.

For the quarter, revenues shot up 16% to $17.9 million. Out of these sales, the company was able to bring in $1.8 million of net income -- a stunning 79% increase compared with the same period a year ago. Boston Acoustics recorded $0.43 in earnings per share (EPS), compared with $0.25 from the third quarter of 2004.

Although the company turned it up to bring booming results in the latest quarter, for fiscal 2005 its numbers are still out of tune. Through nine months, its sales have increased 4% to $42.8 million. To its credit, from the measly revenue growth, its earnings have danced to the beat of a 79% increase. And through three quarters, its EPS has ramped up 87.5% to $0.60.

Much-improved operating margins are one significant reason for the stellar earnings growth. After nine months, operating margins climbed to 7.8% -- an 86% increase compared with the 4.2% a year ago. Boston Acoustics' higher-quality margins has allowed its structural free cash flow to accelerate, ultimately permitting it to keep a clean balance sheet with $7.4 million in cash and no long-term debt. While a Foolish investor would like to see these margins even higher, it is at least a big step in the right direction.

Considering these improvements, is the company worth your investing dollars? While its relationship with DaimlerChrysler (NYSE:DCX) appears to be a success, its sales are still overdependent on a few core customers. As a result, the unpredictability of its growth brings a degree of risk for a stock trading at 29 times earnings. Tweeter-sized Boston Acoustics is pumping out some big bass numbers of late, but an investor will want to listen for a rhythm of consistent, sustainable growth before buying shares.

Fool contributor Jeremy MacNealy does not own shares in any of the companies mentioned.